Where are we and where do we go from here?
Friends, we are facing unprecedented challenges right now and I’m getting a lot of questions about the pandemic’s effect on the real estate market. Certainly, the most important thing here is to recognize that lives are at stake and we must all do our part to limit the quick spread of this virus. And, it is perfectly valid for people to also be concerned about what for many is their biggest investment—or for their plans for potentially moving soon.
As we move through this difficult time, I’m going to use this space to update those interested in what is happening and provide some other timely pro tips and thoughts. Here is how I see things right now…
Everyone wants to know what’s going to happen. Sorry, one thing most all of us industry leaders agree on is that right now is not the time to make predictions about where this will ultimately take the real estate market. Everything depends on how long this all lasts, how the government responds, and ultimately how many come out the other side with jobs and bank accounts intact, not to mention their lives and health. Certainly, nobody knows how that is going to shake out, so any predictions about what the market will look like are ridiculous at this point.
Here is what we do know. Today.
As of last weekend, believe it or not, for buyers and sellers, it seemed little had changed. My personal example seemed pretty indicative of where the market was at, so I’ll just speak to what I know first-hand: Last Thursday I listed a home for $399,900 in Golden Valley that I knew would be a hot property. It got 4 offers and sold over list price by Sunday night. I guessed there would be about 20 showings Friday-Sunday and there turned out to be 18. Another one had scheduled Thursday for a Saturday showing, and canceled Friday night because of concern about the pandemic–only one dropped out of 19. And Monday and Tuesday, I saw a ton of listings go under contract on the MLS (from the weekend’s activity).
But that was ‘last weekend’ already. The past few days I’ve seen a few homes that have gone from ‘active’ to ‘temporarily not available to show’ status. It would make sense that as the pandemic progresses, more sellers will decide to cut the public off from walking through their house–assuming this gets worse, as almost all the experts I’ve heard from predict it will due to the incubation period of the disease and lack of tests (i.e. true cases are likely much higher than reported… I won’t go down that rabbit hole, it’s all out there for the world to see).
Meanwhile, the equities markets are in total turmoil. The government is trying to send investors signals that they will keep the economy from crashing, but many believe they are not talking about big enough numbers yet. Congress passed something today, but they’ll probably need to do much more. As I write this, The DOW is down 14% the last three trading days.
And mortgage rates are up. The typically go down when stocks fall, but not in this chaos. It seems that on days like today when everyone’s dumping stock, investors are saying that investing even in mortgage-backed securities is toxic. There’s so much uncertainty and worry. (There is also a huge oversupply of loans due to recent refinances, but I won’t go down that rabbit hole here either.)
It’s a very volatile situation. Yet we are still seeing fairly robust activity, and the market is still behaving very much like a seller’s market.
In the coming days, as some sellers start to pull their houses off the market, it will probably, at least for a time, become even more of a seller’s market for those who ‘don’t have to move.’ Motivated buyers may have to make strong moves to lock up one of those few great houses that remain available.
The sellers that really need to sell could start to feel even more vulnerable soon if buyers start dropping out of the market. Buyers looking for deals could finally have their day—not every listing will be prone to getting a deal, but some probably will. That’s just common sense—that opportunity will likely present itself here and there.
Moving forward, I’ll continue to monitor everything, particularly showing data, number of new listings, and how many active listings cancel or go from active to “TNAS.” And I have another hot listing coming on tonight. I’ll be watching it all very carefully. Plus, an awful lot is going to hinge on those mortgage interest rates settling down. Most think they will as soon as the stock market gets a little more stable. I’ll be watching that as well.
With this information, I’ll be striving to keep those interested informed, and to provide honest, transparent pros and cons to those thinking of buying or selling during these challenging times.
By the way, did anyone notice that hardly anyone was talking about the three ‘holidays’ we had in the past week? Sorry, St. Patrick’s Day, Friday the 13th and Pie Day.